Sports arenas — the importance of politics, fan response and public money

(Press-News.org) UNIVERSITY PARK, Pa. — Since World War II, professional baseball, football, basketball and hockey teams in the United States have commonly used public money to help build new venues or to facilitate teams moving to a new city. Onlookers sometimes speculate about why tax dollars are being used to build a stadium for a team that is privately owned, often by billionaires. Questions about the appropriateness of public funding have swirled in public discourse for decades.

Politicians and residents who support tax funding for sports-venue projects often point to the culturally unifying nature of sports teams and the revenue generated for surrounding businesses by events at these venues. Sports teams possess a lot of leverage in negotiating deals for stadiums because there are often more cities that want teams than there are teams. Still, history demonstrates that residents and politicians hold significant power and can fundamentally alter these deals — even without contributing public funds, according to Aaron Bonsu, doctoral candidate in kinesiology at Penn State.

Bonsu, who studies the history of stadium projects and their impact on cities and states, published an article in The International Journal of the History of Sport detailing a failed plan for the Boston Bruins to build a new arena in Salem, New Hampshire, an area considered an outer suburb of Boston.

In 1981, the owners of the Boston Bruins planned to move the National Hockey League (NHL) team from its home at the Boston Garden in Boston, Massachusetts, to a new facility in Salem, New Hampshire, where the team was going to receive a $5 million annual tax break to build a new arena. A coalition of national, state and local politicians along with concerned citizens in Massachusetts and New Hampshire were able to prevent the move, and the Bruins remain in downtown Boston to this day.

In this Q&A, Bonsu spoke about how this move was prevented and what this example can mean for other cities in the United States.

Q: Why should people care about a failed arena project from more than 40 years ago?

Bonsu: Questions of where sports venues go and who pays for them have been consistently relevant for decades in America’s big four sports — the NHL, Major League Baseball (MLB), the National Basketball Association (NBA) and the National Football League (NFL).

Stadium deals are always complicated. They are influenced by national, state and local politics, as well as by each city’s sense of how professional sports reflect its status as a nationally influential city. On top of that, the way that different groups — as examples, local and state governments or politicians and local residents — support or undermine one another can also have significant bearing on how these deals are negotiated.

My doctoral adviser Michelle Sikes, associate professor of kinesiology and of African studies at Penn State, was very supportive when I wanted to investigate the history of sports arenas in Boston because this story illustrates how communities can influence sports-venue projects.

Q: How does the Bruins story illustrate the potential for a city to influence a stadium deal?

Bonsu: In the early 1980s, many local Bostonians were upset about the prospect of the team moving to the suburbs. The most important factor in Boston’s retention of the Bruins downtown without spending public money was the formation of coalitions that all pushed back against the proposed relocation. United States Senator Paul Tsongas led a group of Massachusetts-affiliated leaders to challenge the Bruins’ potential move. Meanwhile, community groups and local politicians in both New Hampshire and Boston who opposed the move, wrote opinion pieces for local newspapers and otherwise kept up pressure to keep the Bruins in Boston.

When the Bruins did eventually build a new arena in the 1990s, it was constructed next to the former site and paid for by team owners without any taxpayer funding. The actions and circumstances in Boston exemplify the nuances of local loyalties and investments that drive the outcome of stadium deals across the nation.

In other places, different factions compete rather than cooperate. For example, a suburban community often competes with their metropolitan area to house a team’s arena. If there is one takeaway lesson from Boston, it is that everyone needs to work towards a common goal if a city wants to maintain leverage in its negotiations with a team over a new arena.

Q: Sports teams want tax funding for venue projects to save money. Why do politicians and taxpayers frequently support these projects?

Bonsu: Since the 1960s, many politicians have echoed the rhetoric of sports teams, saying things like, “Without this new stadium, our city will become a second-tier city on the national stage.” And the presence of a major sports franchise does affect the national perception of a city.

Sports teams are an important component of people’s bond and identification with a location. Sports teams are often referred to as their city. If someone said, “Pittsburgh is playing Baltimore this Sunday” in the fall, many people would understand the reference to an NFL game between the Steelers and Ravens. By serving as proxies for their cities, the sports teams advertise the city where they reside.

So, teams can affect the national profile of a city, as well as build a local sense of identity for resident sports fans. For these reasons and others, many politicians believe that their constituents will vote them out if they do not work to retain a local franchise.

Q: When is a new stadium a bad deal for taxpayers?

Bonsu: Research has shown that new stadiums provide minimal gains and can even harm the local economy if public money is pumped into the project without careful consideration of return on investment.

New stadiums can cost billions of dollars. Any time sports teams want a new venue, they provide estimates of revenue generation for local businesses. Understandably, these projections typically suggest that the stadium will be an economic boon, but the truth is often more nuanced. Researchers highlight that patrons may spend less elsewhere in town in order to buy tickets for a game at a new stadium. A new sports venue often comes with financial trade-offs for communities.

The accuracy of these economic analyses matters because cost overruns are common on stadium projects. Taxpayers are sometimes left holding the unexpected bill when a stadium project has public funding.

Taxpayers can even end up paying money for stadiums that already exist. The city of St. Petersburg, Florida, for example, is expected to pay $22.5 million to repair hurricane damage to Tropicana Field, where MLB’s Tampa Bay Rays play.

When costs spiral beyond initial estimates or when revenue projections are not met, taxpayers do not receive the promised return on their investment.

Boston is seen as something of an aspirational model because little to no public money was used in the construction of the venues for the Patriots, the Red Sox, the Bruins or the Celtics. Any city that can keep a sports team in town — with all the cultural and economic benefits a team contributes to a city — without spending taxpayer money is getting a very good deal for its residents.

Q: What typically triggers the relocation of sports teams?

Bonsu: Team moves are often tied to larger economic and demographic trends along with aspirations for a new venue.

Recently, the MLB’s Athletics and NFL’s Raiders announced their departures from Oakland, California, for Las Vegas, Nevada, which grew from 1.4 million residents in 2000 to over 2 million in 2022. In Oakland, both franchises shared a metropolitan area, and therefore attention, with other teams, MLB’s Giants and NFL’s 49ers. In Las Vegas, the Raiders and Athletics solely control major league football and baseball in the city. Both franchises also expressed a desire for a new stadium in Oakland.

The team owners' decisions to relocate were a reflection of trends and circumstances, not the cause of those circumstances.  

Q: What can cities do to protect themselves against the potential loss of a team? 

Bonsu: Historically, there are two prominent options: A city can move aggressively to retain a team if that is realistic, or it can work to build a strong identity beyond sports.  

Boston fought hard against the proposed Bruins move. When the Bruins move was proposed, the team owners asked the New Hampshire legislature to pass a law forfeiting $5 million in tax revenues from the proposed arena. The legislature considered this because arena supporters thought the venue would generate more tax revenue and additional business for the community.

In an effort to thwart the move, politicians in Massachusetts proposed the construction of an arena in downtown Boston that was not slated to host either the Bruins or Celtics. Instead, it was proposed to host concerts and other events — the kind of events that keep sports venues occupied and make them profitable to operate even when sports are not in season.

The threat of the downtown Boston arena made the $5 million tax break look like it would not pay off for New Hampshire, and their legislature rejected the venue plan, effectively dooming the proposed move. Once the move to New Hampshire was abandoned, the proposed arena in Boston was also abandoned. Eventually, the team owners funded a new arena in Boston.

Los Angeles, on the other hand, relies on other aspects of its identity beyond sports. Over the last few decades, Los Angeles has gone from having two NFL teams to having no NFL teams to having two again. But the identity of that city rests on many other facets of life there — its automotive culture, Hollywood, Disneyland and more.

In a way, stadium deals are similar to business negotiations — leverage matters. If a sports team is the entire identity of a city, the owners will know that they can force a favorable deal on local politicians. But if a city’s leaders and residents show strength or see the city as more than a home for professional teams, then they have the ability to influence the negotiation process. This worked in Boston, and it can help cities elsewhere as well.

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